GREEN PRODUCTION

Green production is a business strategy that focuses on profitability
through environmentally friendly operating processes. Proponents of this
management philosophy contend that green production is a sensible course
to follow not only because of the benefits that it bestows on the natural
environment, but also because of its fundamental strategic soundness. As
Stuart Hart, director of the University of Michigan's Corporate
Environmental Management Program (CEMP), indicated in
Northwest Environmental Journal,
"green business strategies based on the principle of environmental
sustainability may constitute a key basis for competitive advantage in the
coming decades." Other business observers concur with this
evaluation. Writing in
Business Horizons,
J. Stephen Shi and Jane M. Kane asserted that many companies that take a
proactive stance toward environmental improvements in production have a
decided advantage over businesses that are indifferent to—or
actively oppose—new standards: "First, they gain a
'greener' image in the public eye. Second, because adopting
new standards takes time and money, they have more time to develop methods
for reducing waste and can do so on their own schedule. Companies that
wait until they are forced to change often find themselves in an
expensive, last-minute scramble to meet the requirements. As a result,
they end up throwing more money at the problem for a less effective
solution than their more proactive counterparts."

DEFINING AND INSTITUTING GREEN PRODUCTION PROCESSES

Many people think that green production simply entails instituting
pollution controls or recycling programs when manufacturing goods. The
reality, however, is that green production processes seek to minimize the
impact of the manufacturing process on the environment at every stage. As
Hart observed in
Northwest Environmental Journal,
"pollution prevention … can only deliver half the loaf:
Green production also means that firms transform their input (raw material
use) and output (product disposition) processes." George Zinkhan
and Les Carlson agreed, stating in the
Journal of Advertising
that green consumers "are worried about more than just the
purchase and the consumption processes. They are also concerned about the
production process, in terms of scarce resources consumed." Taking
all these factors into consideration, Hart and P. Shrivastava defined
green production as follows in a study titled "Greening
Organizations": "Green production focuses upon three
fundamental goals: 1) minimize emissions, effluents, and accidents; 2)
minimize the use of virgin materials and non-renewable forms of energy;
and 3) minimize the life-cycle cost (cradle to grave) of products or
services."

"GREEN" USE OF RAW MATERIALS
"Growing concerns over depletion of forests and other natural
resources, and environmental degradation created by mining and fossil fuel
production," remarked Hart, "suggest that corporations may
need to rethink their raw material and procurement strategies."
Significant sectors of the business community—especially large
corporations engaged in the lumber and energy industries—continue
to take issue with such sentiments, arguing that resources remain
plentiful. But many other businesses, citing the findings of both the
scientific and environmental communities (or the internal data of their
marketing arms), have begun to make changes in the ways that they gather
raw materials for their products. Reliance on recyclable or renewable
materials, new energy and material conservation initiatives, and
"replenishment" programs (such as forest replanting
programs) have all been touted as effective tools in establishing
processes that do not unduly harm the environment.

GREEN MANUFACTURING/PRODUCTION PROCESSES
Information from industry studies and consumer research is being used to
develop new products and to redesign existing products and services in
order to reduce their impact on the environment. In its book
Green Products by Design,
the U.S. Office of Technology Assessment (OTA) advocated green design as
a thoroughly viable goal "in which environmental attributes are
treated as design objectives, rather than as constraints…. green
design incorporates environ-mental objectives with minimum loss to product
performance, useful life or functionality." In fact, supporters of
green production assert that it makes financial sense for businesses of
all sizes and shapes to undertake the process of green design.
"Wasteful and polluting throughput processes lead to inefficient
use of material and human resources as well as occupational and public
health risks," wrote Hart in
Northwest Environmental Journal.
"Just as the 'zero-defects' goal in quality control
demands preventative action and continuous improvement at every production
step, a 'zero-waste' goal can focus efforts toward the
virtual elimination of pollution. This preventative approach has proven
far more efficient than efforts aimed at controlling discharges at the
'end of the pipe.' Corporations are realizing that pollution
prevention can be a cost saving activity (e.g. by lowering compliance,
waste treatment, disposal, and raw material costs)." Subsequently,
some businesses have increasingly steered their product and packaging
designs to use less materials or to be easily disassembled so that
high-value components can be recycled or refurbished more readily.

Analysts generally agree that product packaging is one of the most visible
and important elements of an environmentally sensitive production
operation. Examples of green packaging include the use of recycled content
in packaging materials, source reduction, and refill alternatives.
Whatever form the packaging takes, it should clearly state whether green
claims pertain to the product or to its package. "If the particular
environmental quality that is lauded applies only to a portion or
component of the product or packaging, this fact must also be clearly
indicated," explained Shi and Kane. "For example, a
manufacturer of aluminum foil displays a 'recyclable' claim
on a box of aluminum foil with no qualifications. But if only the foil and
not the box is recyclable, the claim is deceptive. The manufacturer must
instead distinguish between the product and the packaging in claiming such
recyclability. The exception to this rule is when only a minor, incidental
component of the product or packaging is not recyclable."

THE "ENVIRONMENTALLY SUSTAINABLE" COMPANY
As Shrivastava and Hart remarked in "Greening
Organizations," companies that wish to embrace green production
philosophies and processes after years of indifference usually have to
redesign significant aspects of the business, including its mission and
vision, competitive strategies, core technological systems, performance
measurement and reward systems, and organizational processes and culture
(of course, this task is more formidable for larger companies than it is
for small and mid-sized firms). Of the above elements of a business,
perhaps none is more important than "mission and vision,"
for all the other aspects of the organization are fundamentally shaped by
those values. But while the process of establishing a green production
company can be quite daunting, proponents argue that cost savings
associated with pollution prevention efforts, coupled with marketplace
benefits in the realms of reputation and consumer loyalty, can make the
shift a beneficial one not only for the environment, but also for the
company itself.

SMALL BUSINESS AND GREEN PRODUCTION

Although most media attention on green production has been directed at the
efforts of big corporations, increasing numbers of small companies have
successfully established ecologically sensitive business practices as
well. Indeed, some small companies operate in regions or industries that
are ideally suited to green production. Many companies that provide goods
(equipment and clothing manufacturers) or services (retail stores, guiding
services) to backpackers, anglers, mountain bikers, canoeists, kayakers,
campers, and other aficionados of the outdoors are very careful to operate
in environmentally friendly ways. Similarly, companies that operate in
geographical regions that are very supportive of environmental protection
may well publicize their use of green production methods and philosophies.
The marketplace goodwill that can be realized in such situations should
not be underestimated.

Small business consultants, meanwhile, counsel their clients to carefully
research the obligations that a commitment to green production entails
before making any decision. Smaller businesses sometimes have difficulty
securing the necessary financing to switch physical operations to a green
production mode. Moreover, jumps in other operating costs as a result of
changes to green production methods sometimes result in higher prices for
customers, and subsequent drops in sales. While larger companies can
usually shrug off such ripple effects with ease, smaller businesses are
often less able to do so. But consultants acknowledge that green
production methods can boost business as well, increasing sales while
decreasing production costs. Indeed, proponents argue that for many small
businesses—and especially new ventures, which do not have
previously established modes of operation—green production can be a
rewarding business philosophy.